BILL REQ. #:  H-0744.1 

Read first time 01/25/11.   Referred to Committee on Higher Education.

     AN ACT Relating to changing the structure and scope of higher education institutions' technology transfer funding programs and operations in the state; amending RCW 28B.20.283, 28B.20.285, 28B.20.289, 28B.20.291, 28B.20.293, 28B.20.295, 28B.20.287, 42.52.010, 42.52.030, 42.52.110, and 70.210.050; adding new sections to chapter 28B.20 RCW; and repealing RCW 28B.20.296, 28B.20.298, 28B.38.010, 28B.38.020, 28B.38.030, 28B.38.040, 28B.38.050, 28B.38.060, 28B.38.070, and 28B.38.900.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 28B.20.283 and 1995 c 399 s 25 are each amended to read as follows:
     The legislature finds that the development and applied commercialization of new technology is a vital part of economic development.
     The legislature also finds that it is in the interests of the state of Washington to provide a public-private mechanism to transfer and apply research and technology as developed at the institutions of higher education to the private sector in order to create new products ((and technologies which provide job opportunities in advanced technology)) and new businesses that will provide sustainable private sector job opportunities for the citizens of this state.
     It is the intent of the legislature that the University of Washington, the Washington State University, ((and the department of community, trade, and economic development work cooperatively with the private sector in the development and implementation of a world class technology transfer program)) the regional universities, The Evergreen State College, the community and technical college centers of excellence, and the department of commerce work collaboratively with the private sector in the development and implementation of a sustained, competitive, world class, higher education research, development, application of invention, and technology transfer program that creates and sustains private sector jobs.

Sec. 2   RCW 28B.20.285 and 2004 c 151 s 3 are each amended to read as follows:
     (1) A Washington technology center is created ((to be a collaborative effort between the state's universities, private industry, and government. The technology center shall be headquartered at the University of Washington. The mission of the technology center shall be to perform and commercialize research on a statewide basis that benefits the intermediate and long-term economic vitality of the state of Washington, and to develop and strengthen university-industry relationships through the conduct of research that is primarily of interest to Washington-based companies or state economic development programs. The technology center shall:
     (1) Perform and/or)) in two locations, one west of the Cascade mountains in a county with a population greater than one million five hundred thousand, and one east of the Cascade mountains in a county with a population greater than four hundred thousand, to be a collaborative effort between state universities, regional universities, The Evergreen State College, and the community and technical college centers of excellence, private industry, and state government. The mission of the technology center shall be to assist in the applied commercialization of research on a statewide and regional basis that creates private sector jobs, benefits the intermediate and long-term economic vitality of the state of Washington, and develops and strengthens postsecondary education industry relationships. The technology center shall:
     (a) Facilitate research supportive of state science and technology objectives, particularly as they relate to state and regional industries;
     (((2))) (b) Provide leading edge collaborative research and technology transfer opportunities primarily to state and regional industries;
     (((3))) (c) Provide substantial opportunities for training upper division undergraduate and graduate students in science, technology, engineering, and mathematics related degree fields through direct involvement in research and industry interactions;
     (((4))) (d) Emphasize and develop nonstate ((support of the technology center's research)), nonprofit, and private financial support of the community and technical college centers of excellence and the state's higher education research development and commercialization activities;
     (((5))) (e) Administer the investing in innovation grants program((;
     (6) Through its northwest energy technology collaborative, carry out the activities required by RCW 28B.20.296)); and
     (((7))) (f) Provide a forum for effective interaction between the state's technology-based industries and its academic research institutions through promotion of faculty collaboration with industry, particularly within the state and region.
     (2) Functions and operations previously performed by the Spokane intercollegiate research and technology institute must be transferred, to the extent practicable, to the Washington technology center.

Sec. 3   RCW 28B.20.289 and 2003 c 403 s 11 are each amended to read as follows:
     (1) The technology center shall be administered by the board of directors of the technology center.
     (2) The board shall consist of the following members: ((Fourteen)) Seven members from among individuals who are associated with or employed by ((technology-based industries and have broad business experience and an understanding of high technology; eight members from the state's universities with graduate science and engineering programs; the executive director of the Spokane Intercollegiate Research and Technology Institute or his or her designated representative; the provost of the University of Washington or his or her designated representative; the provost of the Washington State University or his or her designated representative; and the director of the department of community, trade, and economic development or his or her designated representative. The term of office for each board member, excluding the executive director of the Spokane Intercollegiate Research and Technology Institute, the provost of the University of Washington, the provost of the Washington State University, and the director of the department of community, trade, and economic development, shall be three years. The executive director of the technology center shall be an ex officio, nonvoting member of the board. The board shall meet at least quarterly. Board members shall be appointed by the governor based on the recommendations of the existing board of the technology center, and the research universities.)) science, technology, engineering, and mathematics related industries and have broad business experience and an understanding of research, development, and commercialization in these fields; six members from the state's institutions of higher education, as follows: Two representatives of the University of Washington; two representatives of the Washington State University; one representative from the community and technical colleges on behalf of the centers of excellence; one representative of the regional universities; and the director of the department of commerce or the director's designated representative. The representative of the regional universities shall serve in rotating terms among the regional universities, beginning with the largest regional university in the state. The term of office for each board member shall be four years in staggered terms. The director of the department of commerce shall serve as an ex officio, nonvoting member of the board. The board shall meet at least quarterly. Board members shall be appointed by the governor subject to confirmation by the senate, based on the recommendations of the existing board of the technology center. The governor shall stagger the terms of the first group of appointees to ensure the long term continuity of the board.
     (3) The duties of the board include:
     (a) Developing the general operating policies for the technology center;
     (b) Appointing the executive director of the technology center;
     (c) Approving the annual operating budget of the technology center;
     (d) Establishing ((priorities)) a competitive process for the selection and funding of research projects that guarantee the greatest potential return on the state's investment, which includes private sector job creation;
     (e) ((Approving and allocating funding for research projects conducted by the technology center, based on the recommendations of the advisory committees for each of the research centers;
     (f))) In cooperation with the department of ((community, trade, and economic development)) commerce, developing a biennial work plan and ((five-year)) six-year strategic plan for the technology center that are consistent with the statewide technology development and commercialization goals;
     (((g))) (f) Coordinating with the University of Washington, Washington State University, and other participating institutions of higher education in the development of training, research, and development programs to be conducted at the technology center that shall be targeted to meet ((industrial needs)) private sector needs for job creation;
     (((h))) (g) Assisting the department of ((community, trade, and economic development)) commerce in the department's efforts to develop state science and technology public policies and coordinate publicly funded programs;
     (((i))) (h) Performing the duties required under chapter 70.210 RCW relating to the investing in innovation grants program;
     (((j))) (i) Reviewing annual progress reports on funded research projects that are prepared by the temporary advisory committees ((for each of the research centers)) assigned to each project as necessary;
     (((k))) (j) Providing an annual report to the governor and the legislature detailing the activities and performance of the technology center; and
     (((l))) (k) Submitting annually to the department of ((community, trade, and economic development)) commerce an updated strategic plan ((and a statement)) outlining clearly identifiable performance metrics for funded research projects, as well as identifying barriers that may exist to technology transfer to the private sector and recommendations as to how such barriers could be overcome, plus an overall assessment of performance measured against the mission, roles, and contractual obligations of the technology center.

NEW SECTION.  Sec. 4   A new section is added to chapter 28B.20 RCW to read as follows:
     (1) The executive director of the technology center shall serve as its chief executive officer and administer the provisions of this chapter, employ such personnel as may be necessary to implement the purposes of this chapter, and utilize staff of partnering institutions of higher education to the fullest extent possible.
     (2) The executive director of the technology center must report solely to the board of the technology center on matters pertaining to center operations.

Sec. 5   RCW 28B.20.291 and 1992 c 142 s 5 are each amended to read as follows:
     The ((University of Washington, Washington State University, and other)) participating state institutions of higher education, including community and technical college centers of excellence as outlined in RCW 28B.50.902, shall provide the affiliated staff, faculty, and facilities required to support the operation of the technology center.

Sec. 6   RCW 28B.20.293 and 1995 c 399 s 27 are each amended to read as follows:
     (1) The department of ((community, trade, and economic development shall)) commerce may contract with ((the University of Washington)) a qualified, private sector or nonprofit, independent third party for the expenditure of state-appropriated funds for the operation of the Washington technology center. The department of ((community, trade, and economic development)) commerce shall provide guidance to the technology center regarding expenditure of state-appropriated funds and the development of the center's strategic plan. The director of the department of ((community, trade, and economic development)) commerce shall not withhold funds appropriated for the technology center if the technology center complies with the provisions of and attains the performance specified in its contract with the department of ((community, trade, and economic development)) commerce.
     (2) The department shall be responsible to the legislature for the contractual performance of the center. Performance metrics in the contract must include, but are not limited to:
     (a) Number of net direct new private sector jobs created;
     (b) Median wage of jobs created;
     (c) Amount of directly related nonstate additional investment leveraged;
     (d) Amount of state revenue generated through taxes and fees;
     (e) Number of undergraduate and graduate students trained through research and industry interactions; and
     (f) Number of faculty and industry collaborations fostered, including the number of postsecondary institutions and businesses involved.

NEW SECTION.  Sec. 7   A new section is added to chapter 28B.20 RCW to read as follows:
     (1) The likelihood of in-state or regional private sector job creation is a key factor the technology center must use in evaluating proposals for funding. The expectation is that job opportunities stemming from technology center investments are developed and retained in Washington.
     (2) For each job created outside of Washington that exceeds the number of jobs created in Washington or in the Pacific Northwest economic region as defined in RCW 43.147.010, for an eight-year time period beginning with the closing date of the last grant made to an entity, grantees must repay an amount to the Washington technology center equal to ten percent of salary and benefits for those positions.
     (3) The total repayment amount under subsection (2) of this section may not exceed the amount invested by the technology center.
     (4) Each grant recipient must submit a report to the technology center every two years, beginning two years after the closing date of the last grant, until the eighth year after the closing date of the last grant. The report must contain information, as required by the technology center, from which the technology center may determine whether the recipient is meeting the requirements of this section or if repayment is required.
     (5) The employment security department must provide such information as needed for the technology center to certify all determinations of employment under this section.
     (6) The requirements of subsections (2) through (4) of this section must be included in the grant agreement.

Sec. 8   RCW 28B.20.295 and 1992 c 142 s 7 are each amended to read as follows:
     The facilities and resources of the technology center shall be made available to other participating institutions of higher education within the state when this would benefit specific program needs. The technology center, in consultation with participating institutions of higher education, shall develop a written process for making its facilities and resources available in a consistent and transparent manner that prioritizes scarce resources.

Sec. 9   RCW 28B.20.287 and 2004 c 151 s 4 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 28B.20.285 ((and)), 28B.20.289 through 28B.20.295, and sections 4 and 7 of this act.
     (1) "Technology center" means the Washington technology center, including the affiliated staff, faculty, facilities, and research centers operated by the technology center.
     (2) "Board" means the board of directors of the Washington technology center.
     (3) "High technology" or "technology" includes but is not limited to the modernization, miniaturization, integration, and computerization of electronic, hydraulic, pneumatic, laser, mechanical, robotics, nuclear, chemical, telecommunication, and other technological applications to enhance productivity in areas including but not limited to manufacturing, communications, medicine, bioengineering, renewable energy and energy efficiency, and commerce.
     (4) "Region" or "regional" means the Pacific Northwest economic region as defined in RCW 43.147.010.
     (5) "Private sector" means the part of an economy in which goods and services are produced and distributed by individuals and organizations that are not part of federal, state, or local government.

Sec. 10   RCW 42.52.010 and 2005 c 106 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Agency" means any state board, commission, bureau, committee, department, institution, division, or tribunal in the legislative, executive, or judicial branch of state government. "Agency" includes all elective offices, the state legislature, those institutions of higher education created and supported by the state government, and those courts that are parts of state government.
     (2) "Head of agency" means the chief executive officer of an agency. In the case of an agency headed by a commission, board, committee, or other body consisting of more than one natural person, agency head means the person or board authorized to appoint agency employees and regulate their conduct.
     (3) "Assist" means to act, or offer or agree to act, in such a way as to help, aid, advise, furnish information to, or otherwise provide assistance to another person, believing that the action is of help, aid, advice, or assistance to the person and with intent so to assist such person.
     (4) "Beneficial interest" has the meaning ascribed to it under the Washington case law. However, an ownership interest in a mutual fund or similar investment pooling fund in which the owner has no management powers does not constitute a beneficial interest in the entities in which the fund or pool invests.
     (5) "Compensation" means anything of economic value, however designated, that is paid, loaned, granted, or transferred, or to be paid, loaned, granted, or transferred for, or in consideration of, personal services to any person.
     (6) "Confidential information" means (a) specific information, rather than generalized knowledge, that is not available to the general public on request or (b) information made confidential by law.
     (7) "Contract" or "grant" means an agreement between two or more persons that creates an obligation to do or not to do a particular thing. "Contract" or "grant" includes, but is not limited to, an employment contract, a lease, a license, a purchase agreement, or a sales agreement.
     (8) "Ethics boards" means the commission on judicial conduct, the legislative ethics board, and the executive ethics board.
     (9) "Family" has the same meaning as "immediate family" in RCW ((42.17.020)) 42.17A.005.
     (10) "Gift" means anything of economic value for which no consideration is given. "Gift" does not include:
     (a) Items from family members or friends where it is clear beyond a reasonable doubt that the gift was not made as part of any design to gain or maintain influence in the agency of which the recipient is an officer or employee;
     (b) Items related to the outside business of the recipient that are customary and not related to the recipient's performance of official duties;
     (c) Items exchanged among officials and employees or a social event hosted or sponsored by a state officer or state employee for coworkers;
     (d) Payments by a governmental or nongovernmental entity of reasonable expenses incurred in connection with a speech, presentation, appearance, or trade mission made in an official capacity. As used in this subsection, "reasonable expenses" are limited to travel, lodging, and subsistence expenses incurred the day before through the day after the event;
     (e) Items a state officer or state employee is authorized by law to accept;
     (f) Payment of enrollment and course fees and reasonable travel expenses attributable to attending seminars and educational programs sponsored by a bona fide governmental or nonprofit professional, educational, trade, or charitable association or institution. As used in this subsection, "reasonable expenses" are limited to travel, lodging, and subsistence expenses incurred the day before through the day after the event;
     (g) Items returned by the recipient to the donor within thirty days of receipt or donated to a charitable organization within thirty days of receipt;
     (h) Campaign contributions reported under chapter 42.17A RCW;
     (i) Discounts available to an individual as a member of an employee group, occupation, or similar broad-based group; and
     (j) Awards, prizes, scholarships, or other items provided in recognition of academic or scientific achievement.
     (11) "Honorarium" means money or thing of value offered to a state officer or state employee for a speech, appearance, article, or similar item or activity in connection with the state officer's or state employee's official role.
     (12) "Official duty" means those duties within the specific scope of employment of the state officer or state employee as defined by the officer's or employee's agency or by statute or the state Constitution.
     (13) "Participate" means to participate in state action or a proceeding personally and substantially as a state officer or state employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation, or otherwise but does not include preparation, consideration, or enactment of legislation or the performance of legislative duties.
     (14) "Person" means any individual, partnership, association, corporation, firm, institution, or other entity, whether or not operated for profit.
     (15) "Regulatory agency" means any state board, commission, department, or officer, except those in the legislative or judicial branches, authorized by law to conduct adjudicative proceedings, issue permits or licenses, or to control or affect interests of identified persons.
     (16) "Responsibility" in connection with a transaction involving the state, means the direct administrative or operating authority, whether intermediate or final, and either exercisable alone or through subordinates, effectively to approve, disapprove, or otherwise direct state action in respect of such transaction.
     (17) "State action" means any action on the part of an agency, including, but not limited to:
     (a) A decision, determination, finding, ruling, or order; and
     (b) A grant, payment, award, license, contract, transaction, sanction, or approval, or the denial thereof, or failure to act with respect to a decision, determination, finding, ruling, or order.
     (18) "State officer" means every person holding a position of public trust in or under an executive, legislative, or judicial office of the state. "State officer" includes judges of the superior court, judges of the court of appeals, justices of the supreme court, members of the legislature together with the secretary of the senate and the chief clerk of the house of representatives, holders of elective offices in the executive branch of state government, chief executive officers of state agencies, members of boards, commissions, or committees with authority over one or more state agencies or institutions, and employees of the state who are engaged in supervisory, policy-making, or policy-enforcing work. For the purposes of this chapter, "state officer" also includes any person exercising or undertaking to exercise the powers or functions of a state officer.
     (19) "State employee" means an individual who is employed by an agency in any branch of state government. For purposes of this chapter, employees of the superior courts are not state officers or state employees.
     (20) "University" includes "state universities" and "regional universities" as defined in RCW 28B.10.016 and also includes any research or technology institute affiliated with a university, including without limitation, ((the Spokane Intercollegiate Research and Technology Institute and)) the Washington Technology Center.
     (21) "University research employee" means a state officer or state employee employed by a university, but only to the extent the state officer or state employee is engaged in research, technology transfer, approved consulting activities related to research and technology transfer, or other incidental activities.
     (22) "Thing of economic value," in addition to its ordinary meaning, includes:
     (a) A loan, property interest, interest in a contract or other chose in action, and employment or another arrangement involving a right to compensation;
     (b) An option, irrespective of the conditions to the exercise of the option; and
     (c) A promise or undertaking for the present or future delivery or procurement.
     (23)(a) "Transaction involving the state" means a proceeding, application, submission, request for a ruling or other determination, contract, claim, case, or other similar matter that the state officer, state employee, or former state officer or state employee in question believes, or has reason to believe:
     (i) Is, or will be, the subject of state action; or
     (ii) Is one to which the state is or will be a party; or
     (iii) Is one in which the state has a direct and substantial proprietary interest.
     (b) "Transaction involving the state" does not include the following: Preparation, consideration, or enactment of legislation, including appropriation of moneys in a budget, or the performance of legislative duties by an officer or employee; or a claim, case, lawsuit, or similar matter if the officer or employee did not participate in the underlying transaction involving the state that is the basis for the claim, case, or lawsuit.

Sec. 11   RCW 42.52.030 and 2005 c 106 s 2 are each amended to read as follows:
     (1) No state officer or state employee, except as provided in subsection (2) of this section, may be beneficially interested, directly or indirectly, in a contract, sale, lease, purchase, or grant that may be made by, through, or is under the supervision of the officer or employee, in whole or in part, or accept, directly or indirectly, any compensation, gratuity, or reward from any other person beneficially interested in the contract, sale, lease, purchase, or grant.
     (2) No state officer or state employee may participate in a transaction involving the state in his or her official capacity with a person of which the officer or employee is an officer, agent, employee, or member, or in which the officer or employee owns a beneficial interest, except that an officer or employee of an institution of higher education ((or the Spokane intercollegiate research and technology institute)) may serve as an officer, agent, employee, or member, or on the board of directors, board of trustees, advisory board, or committee or review panel for any nonprofit institute, foundation, or fund-raising entity; and may serve as a member of an advisory board, committee, or review panel for a governmental or other nonprofit entity.

Sec. 12   RCW 42.52.110 and 1996 c 213 s 5 are each amended to read as follows:
     No state officer or state employee may, directly or indirectly, ask for or give or receive or agree to receive any compensation, gift, reward, or gratuity from a source for performing or omitting or deferring the performance of any official duty, unless otherwise authorized by law except: (1) The state of Washington; or (2) in the case of officers or employees of institutions of higher education ((or of the Spokane intercollegiate research and technology institute)), a governmental entity, an agency or instrumentality of a governmental entity, or a nonprofit corporation organized for the benefit and support of the state employee's agency or other state agencies pursuant to an agreement with the state employee's agency.

Sec. 13   RCW 70.210.050 and 2003 c 403 s 6 are each amended to read as follows:
     (1) The board may accept grant proposals and establish a competitive process for the awarding of grants.
     (2) The board shall establish a peer review committee to include board members, scientists, engineers, and individuals with specific recognized expertise. The peer review committee shall provide to the board an independent peer review of all proposals determined to be competitive for a grant award that are submitted to the board.
     (3) In the awarding of grants, priority shall be given to proposals that leverage additional private and public funding resources.
     (4) Up to fifty percent of available funds from the investing in innovation account may be used to support commercialization opportunities for research in Washington state through an organization with commercialization expertise ((such as the Spokane intercollegiate research and technology institute)).
     (5) The center may not be a direct recipient of grant awards under chapter 403, Laws of 2003.

NEW SECTION.  Sec. 14   The following acts or parts of acts are each repealed:
     (1) RCW 28B.20.296 (Washington technology center -- Renewable energy and energy efficiency business development -- Strategic plan) and 2004 c 151 s 2;
     (2) RCW 28B.20.298 (Clean energy research, development, manufacturing, and marketing -- Findings -- Policy) and 2004 c 151 s 1;
     (3) RCW 28B.38.010 (Spokane intercollegiate research and technology institute) and 2004 c 275 s 55 & 1998 c 344 s 9;
     (4) RCW 28B.38.020 (Administration -- Board of directors -- Powers and duties) and 1998 c 344 s 10;
     (5) RCW 28B.38.030 (Support from participating institutions) and 1998 c 344 s 11;
     (6) RCW 28B.38.040 (Operating staff -- Cooperative agreements for programs and research) and 1998 c 344 s 12;
     (7) RCW 28B.38.050 (Role of department of community, trade, and economic development) and 1998 c 344 s 13;
     (8) RCW 28B.38.060 (Availability of facilities to other institutions) and 1998 c 344 s 14;
     (9) RCW 28B.38.070 (Authority to receive and expend funds) and 1998 c 344 s 15; and
     (10) RCW 28B.38.900 (Captions not law) and 1998 c 344 s 16.